Tradepoint To Start European Stock Dealing Service In July

Jason Gorringe, Taxnews.com, London

30 June 2000

Alternative stock market operator Tradepoint will go live with a pan-European share trading service on 10 July. Richard Kilsby, chief executive of Tradepoint, has set the group the target of being the "principal market place for Eurotop 300 shares by 2001".

Tradepoint will offer full dealing services in all the main index stocks in France, German and Italy as well as the FTSE Eurotop 300, Stoxx and MCI indices which cover smaller European markets as well. The share-trading service will operate will operate with a counterparty facility provided by the London Clearing House, a seamless back office with clearing through Euroclear and a single rulebook for all stocks regardless of listing location.

Tradepoint's timing suggests that it trying to take advantage of the problems and delays which have beset the proposed iX link-up between the established London and Frankfurt exchanges, although it is interesting that Goldman Sachs, Merrill Lynch and Morgan Stanley, the three banks which are responsible for much of the impetus behind the iX deal, are also the major shareholders in Tradepoint.

Given that the London/Frankfurt initiative now looks likely to run into the sand, or at the least to be postponed for many months while conflicting interests sort themselves out, Tradepoint may have a good opportunity. Still, so far it accounts for just 1% of UK trading, and volumes are rising only slowly. Tradepoint also faces competition from Jiway, another Europe-wide ecn backed by American banking money.

The crucial issue is liquidity: as long as the ecn's aren't large enough to generate their own dealing liquidity, and continue to rely on the established exchanges for pricing and depth of dealing, so long will the 'legacy' exchanges remain dominant. But time is running out . . .

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